Continuing its divestment of the shares it obtained in General Motors for bailing out the automaker in 2009, the United States Treasury told Congress yesterday that it has sold $876.9 million dollars worth of GM stock last month, somewhere between 23 and 26 million shares, based on the trading prices during July. By those calculations, the U.S. government still holds about 136 million shares of GM, which closed yesterday at $35.98. At the rate that Treasury is selling off its GM shares, the government’s equity will be completely divested by early 2014. The government originally held a 61% stake in GM following the $49.5 billion bailout, over 500 million shares. By selling some of those shares, Treasury has recouped $34.6 billion of the $49.5 billion.

Also yesterday, the UAW’s health care trust finalized it’s sale of 45.4 million warrants that allow the holder to buy GM stock at a price of $42.31 before the end of 2015. The warrants were sold for $171 milion. According to the Detroit News’ David Shepardson, they were sold in a “modified Dutch auction” and can now be purchased on the open market. Shepardson told TTAC that large institutional investors were the likely buyers. At the offered price of $3.85 per warrent, GM stock would have to rise over $12 a share from its current price for it to be profitable should the purchasers exercise their rights. Since the UAW had no problem selling the warrants, it stands to reason that at least some of those large investors think that GM, or buying the warrants, which can be traded, is a good bet.

Still wanting to destroy America from the safety of your mom’s basement? Meanwhile Japan continues to have the world’s largest debt per capita from subsidizing a low yen to help it’s automakers and other exporters.

You could do without the attacks, Big Al. And I seriously doubt that much of GM would have survived without U.S. govt. input. Intellectual properties? Of course. But the vast majority of the brands would have been trash-canned save for the Corvette and perhaps the pickup trucks.

The paper is hardly worthless if they are selling it off for hundreds of millions. Also there will be a loss, somewhere in the region of $14 billion, but from an accounting perspective it isn`t carried until “the end of the world”. We might not like a loss (although doing nothing also had some costs) but it doesn`t follow us until the year 3000!

mike978, GM has been real good to me since I held several blocks of pre-bankruptcy stock and was able to sell it all by 2008 before the death of GM.

But I wouldn’t buy today’s GM paper with YOUR money! Even if I could, I wouldn’t.

The people who are buying GM’s paper are forced by the Obama administration to do so as a sort of payback for all the handouts and bailout money they got; like bailed out banks or other financial institutions that enjoyed a cash infusion from the government in any way, shape or form during the financial crisis.

The bottom line remains. There is no way to mitigate the losses we incurred bailing out GM.

Imagine how much good that money could have done had we only liquidated and liquefied GM and all its parts. It’s not like we don’t have an auto industry in America.

Seeing failed anythings bailed out and resurrected is something that is totally new and alien to me. I was sorry to see Studebaker go, and Packard, but not AMC. No help from Uncle Sam then and the UAW was SOL!

But as long as the majority votes for this new bailout mentality and is happy to pay for it with their taxes, I can learn to adjust as long as I don’t have to pay for it, or contribute to it.

And you know, I’m not the only one who thinks this way, judging from the workforce participation in the US. I don’t believe it has ever been this low before now, and it has nothing to do with the 7.4% official unemployment rate.

@WSN- ”There was this Global financial crisis you see, and there was no private money to purchase GM.”

“That’s not entirely true.” you wrote.

That is absurd. The auto market collapsed because there was no credit available to finance anything.

Oh yes it was true. Don’t you pay attention to the news? Treasury had to push a couple $Trillion dollars into banks to get liquidity back. Study events. the pittance put into saving our most important industrial base was trivial relative to the rest of it.
There was no commercial alternative, UAW or not.

You can’t win this argument, simply because GM was never put on sale with UAW strings removed.

Of course there are lots of investor money in the market. If there is no investor money DOW would go to 0. Instead, DOW held at 7000, because investors poured in trillions of dollars to buy cheap, and was subsequently rewarded.

Why wasn’t GM’s stock and company not saved the same way thousands of other companies were saved? Because they see the negative equity of UAW exceeding whatever positive there is left in GM.

@WSN:
The DOW didn’t go to zero because the U.S. government backstopped the market before that could happen. Especially if AIG and the rest of the banking industry imploded, we very well could have seen the DOW plummet much lower than where it bottomed out. There wasn’t “trillions of dollars pouring in” because those investors had lost pretty much all of their liquidity and couldn’t find anyone else to lend them more. Uncle Sam basically agreed to hold the world on his shoulders until investors could sort through the carnage and find some money to start lending again.

Here in the USA, what happened was, as I see it, the functional equivalent of what we call Chapter 11 bankruptcy.

It was for just a moment in October and November very, very serious shit for us and for the rest of the world. Normal Chapter 11 bankruptcy of two major car US companies and the insurance company AIG would have shut down the world economy long enough for it to go into a death spiral (God only knows what crazy mortgages were in those tranches).

I believe that both John Maynard Keynes and Joseph Schumpeter would have agreed on the bailouts. Our normally lackluster politicians responded as needed.

I still remember the loathing look on the ample face of a Populist, Main Street Senator from Alabama as he spoke about the bailouts. That same image also revealed that the dude had not missed a meal in a long, long time.

I am not pretending. I know what was happening in great detail as well as the plans to deal with events. The 2007 contract, implemented fully by 2010 is THE enabler for Ford’s profitability as well as GM and Chrysler. It would have added $8B to the bottom line for GM just by eliminated retiree health care and the jobs bank. Other changes reduced costs so much that it became possible for GM to move production to Orion Township from Korea and still make money on the Sonic.

The products winning awards today, commanding higher prices than the competition, were all designed before the collapse.

GM had a reasonable chance to pull through. I know it, and try to explain for others. I am not pretending in any way.

1. Covenants in GM & Chrysler’s legal arrangements with their suppliers, dealers and bankers meant that Chapter 11 would have triggered an accounting mess that would have taken months if not years to sort out.

2. The world’s banks were temporarily crippled. There was no available source of debtor in possession (DIP) financing without soverign government guarantees. DIP is absolutely necessary for any Chapter 11 reorganization.

3. Ford spoke up in favor of the ‘bailout’ on the grounds that the delays inherent in Chapter 11 would bring down their suppliers and ruin them as well.

Bankruptcy laws in the USA are still very much a work in progress. In late 2008, they did provide a framework that helped all of us avoid a super disaster. In an ideal world maybe some other solution might exist. Let that be a lesson for next time.

No disrespect intended, but we do have an old saying from WWII:
‘little man so spick and span, where were you when the shit hit the fan?’

The American taxpayer was set to lose lots of money either way. Either through the events that occurred or if they were liquidated. The other way just had so many unknowns and unpredictables associated with it was deemed to high of a risk for the US government. And governments rarely enjoy the unpredictable.

GM being liquidated has high cost for taxpayers just as well. From unemployment insurance and the loss of taxes at the local and state levels to the massive amounts that the PBGC would have to cover in unfunded pensions liabilities.

Sergio’s big play is not so much moving Chrysler to the Netherlands – Walter Chrysler incorporated in Delaware – but moving Fiat out of Italy. The combined business will possibly still be called Chrysler, but Fiat cars will be a division, with facilities in various countries. There might be a divisional headquarters still in Italy, to satisfy Italian politicians, but the main business will be in North America where the sales and profits are.

It’s all part of the Agnelli family’s drive to piecemeal out the former Fiat conglomerate into smaller pieces that can be folded in dying/unprofitable markets and expanded in growth/profitable markets. Italy/Europe is a dying auto market that’s tough to do business in, while NA is still open and profitable for the foreseeable future.

“I’m in the camp that favored liquidating GM and pimping off its various parts like so much porn fodder.”

No surprise, HDC we know that and you are mostly wrong, just like a lot of your ilk on this board.

You live off government largesse!

We are told you were a government worker for the majority of your career (retired military ,not one of those bad government workers, no sir) , you boast of employing illegals “under the table” and living off the grid.

ExPatBrit, if you call $815 a month living off government largesse, try living on that. That’s exactly what I got after 20 years of military service. That and some physical damage incurred due to enemy fire while on my trip to Viet Nam.

Oh, and let me tell you about what I get each month for social security, $1057 each month. When you add all that up, it ain’t worth a hill of beans since I make more chump change in my spare time renovating homes that belong to my wife and her family’s real estate company.

So please spare me your holier than thou attitude because your assumptions are wrong. You have no f’n idea what you’re talking about and haven’t served a day in America’s military to see what a fine organization it is, albeit woefully underpaid for the enlisted grades.

If the UAW got paid what our enlisted military got paid when I was in, their cars would fall apart before they left the assembly plants. Because the UAW got paid more than our enlisted military the cars fell apart AFTER they left the plant. Plenty of documented history there, for decades.

When Bush bailed out GM and Chrysler that was wrong. When Obama gave GM Carte Blanche that was even more wrong. No partisanship on my part. Wrong is wrong, no matter which party does it.

But in America the majority rules and as such America always gets exactly what it deserves, because we vote for it! And people who don’t agree with majority rule find ways not to support it.

Only 67% of America’s available workforce chooses to work. Do you realize that if 7.4% are officially listed as unemployed by BLS, the remaining 25.6% choose not to be employed?

Maybe they work off the grid. We have a HUGE underground economy in America, in case you don’t know. And that’s not even counting the drug traffickers which are a category all their own.

So as far as working off the grid? You have no idea how many people are doing just that, many of them retired military folks who do not re-enter the workforce after they retire. And it isn’t just government workers who seek covert employment.

A retired plumber, age 70, from New Jersey moved to the gas & sip where I live and does more plumbing and irrigation work now than he ever did in NJ. And, he gets to keep all of it instead of doling it out to freeloaders or contributing to the redistribution of America’s wealth.

These are hardworking folks. They work harder for themselves than they would for any employer!

And we support illegal aliens. We hire them. We feed them. We clothe them. We value their productivity. And we pay them very well if they have skills — more than they get paid if they were legally employed.

In New Mexico we even give them drivers licenses and sell them cars before they scatter to the four corners of these United States to take jobs Americans are too proud to do.

It’s all in one’s perspective. You have yours, me and my ilk have ours. And me and my ilk live pretty darn well considering our official income is below the poverty line. And we don’t drive our employers into bankruptcy like the UAW did, nor do we stand in line for Obama’s welfare handouts, foodstamps and free cellphones.

“With all my money they have got”
At a loss of $14B, that works out to $45 for everyone in the US. $45. It’s pathetic that people are still whining about it.
Christ, go clean out your garage and donate some crap to goodwill; get a tax write-off. There’s your $45.

ExPatBrit, no military man who served his country honorably should ever show humility.

They should hold their head high and walk proud to make up for cheap-shot ingrate cowards like you.

Most of them gave a lot more for this country than you did. Some gave legs, arms, eyes, and even their lives. What did you give? Nothing but a hard time and endless criticism.

Americans are an ornery bunch by nature and never show humility. That’s why we had the tea-party in Boston to get out from under the thumb of the Brits.

And what followed was that Americans were to be emulated and respected. It was Americans last century who saved the Western world from becoming German-speaking territory and it was America that saved the Eastern world from becoming Japanese-speaking colonies in WWII. It was Americans who restored the world afterwards, fed them, clothed them and rebuild them.

Since Obama became our national leader America has the political equivalent of no respect on this planet and two-bit nations and half-wit hotshots like yourself feel free to disrespect America while at the same time flocking to come here in droves to enjoy the American lifestyle.

The more people find work in Boston the more people will pay to support Obama’s policies, and we in New Mexico will send as many illegal aliens to Boston as we can, all sporting brand new drivers licenses to seek work there.

Maybe you can employ one or two in your town house as a housekeeper or maid.

@jimbob457
We do have bankruptcy rules. From what I can gather they do differ from what you have in the US.

I remember watching a documentary on US bankruptcies and it stated that the US has quite lax bankruptcy rulings to keep the economy ticking over. I was quite fascinated by that comment. Someone must lose out.

Australia’s financial and banking sector has more rigid regulations than the US, I do know this. Our ‘Big 4′ banks are probably some of the best in the world due to our banking regulations.

But, Australia as a whole appears to be more skewed towards a user pay society, not a subsidised society like the US/Euro/Japan.

It’s not that we don’t have ‘welfare’ as such, but our markets and businesses have to fend for themselves.

I actually had a quick read on your Chapter 11 today and it appears businesses are protected better than ours when they fail.

But, why have a poor business? Google the Tri Continental fail in Australia. Here if a large business goes bust, all lose and another takes it’s place.

The ‘To Big To Fail’ attitude will bring countries down eventually. Nothing is forever.

GM is strong, the largest seller in the world in the most recent quarter and they are just getting back on their feet after the devastation of the externally caused bankruptcy.

They are the quality leaders in the US, dominating most recent rankings, and making a lot of money here along the way.

The company has invested more in capital improvements in America alone than the $9.6B the bailout will cost, if remaining shares sell for the current price. Failure to act would have cost ten times as much.

While I was in favor of the bailout instead of letting GM and Chrysler collapse, I disagree with your term of “externally caused bankruptcy”. The financial crisis was the last straw that broke GM’s & Chryco’s back but both companies were in big trouble before this happened. If the crisis hadn’t happened GM & Chryco would have found themselves in the same or very similar financial straights.

GM was bleeding money for years and management was dragging their collective feet on doing the painful things that would be required to pull themselves out of their death spiral.

Forcing GM into this bankruptcy/bailout deal made them make the hard decisions in order to survive as a leaner stronger company. Shuttering Saturn, Pontiac, Hummer, and removing their investments from Saab, Suzuki were the right decisions that nobody in GM wanted to do.

In hindsight, it was probably best the financial “perfect storm’ hit when it did because with all of the other financial sh*t going on, having two of Detroit’s Big Three fail at the same time was something the country probably couldn’t take.

Am I happy GM and Chrysler survived? Yes.
Have they learned their lesson? I certainly hope so. Because if it happens again, you can be pretty sure the government will be VERY reluctant to hold out its hat again.

Nice to hear your measured voice of sanity. In the mid-1990’s I was actually paid (quite well) by the second largest commercial bank in the USA to develop metrics to help identify prospective bankrupt borrowers. To my astonishment GM showed up on several of my screens.

Looking back in retrospect, I have actually ended up on the ‘soft’ side of town. Imo, sad to say, in many cases, the old corporate culture rules. We used to joke about Chapter 11, then Chapter 22, then Chapter 44, und so weiter. Not so damned funny in 2013.

Hats off the good men and women in GM and Chrysler. May God bless your best efforts.

@Blackcloud_9- Good points, some valid, some incongruent with reality.

Using the expression “last straw” trivializes the severity of the events in fall ’08. Toyota globally, and Q1 ’09 losing more than GM because of US events is evidence that those events were not trivial.
But you are right that GM was already broke from a long history of unsustainable labor costs and costly government policy. I continue to believe the plans had a good chance to work but for the perfect storm in ’08.

Using facts and logic to prognosticate: GM broke even on an operating basis in 2007. Adding the $9+B/year cost reductions of the ’07 contract, brings GM to a healthy profit, and still does not include the benefits of the further structural costs taken out of the business but not in place for the full year of ’07.

In the GM of 2007,Malibu was car of the year and enjoyed strong sales. Lutz impact on styling was paying off, and the brands were getting more diverse styling. The new products we released were well received and we had lots of better stuff in the pipeline. Who knows how an Ultra V8, 4.5L Diesel, , a diversity of Zeta based large sedans, Cadillac ATS and a Pontiac platform mate being the coolest.

The B-P-GMC at the time was a larger channel than Mercedes or BMW globally and the complement of Buick Luxury, Pontiac Sport, and GMC utility- all at premium prices, was a great business plan.

GM was looking good until gas went to $4 in the beginning of the year. I was the beneficiary of voluntary golden handshake as part of the cost reduction and liquidity improvements they were taking. That let me retire Nov 1, 2008. The plan was in place, had the potential to work, but was blown up by the absolute collapse of car sales for any maker.

That external event made GM burn through cash so fast that a massive capital infusion, loan or otherwise, was necessary to absorb it. That is the direct cause. More like a two by four to your head, than a straw on a camel’s back.

Is it your opinion, then, that we would have been better off to lose our entire auto industry? There is little doubt that would have been the alternative, though we can’t know the road not travelled.
I suppose you would rather have devastated the country. It has been estimated that failure to act would have cost us $140Billion or so, really more like 15 times the loss on the stock re-sale.

I share your philosophy, more than you may know, but have a far better understanding of what happened and why. Obama’s Task force set the conditions and the repayment methodology and the UAW favoring provisions can be criticized as cronyism.

You and others said they would go down. Instead, they are making plenty of money, and really rebounding. This is evidence of what I predicted all along. The company has not received a dime since the funding of the bankruptcy, and has no prospect of any need for government assistance of any kind. How do you imagine they will be an on-going drain? I am curious.

I have been telling you GM would be strong, the data keeps rolling in to prove me right.

If they were weak and going down, if you were right in your understanding, they would not have re-taken the global sales lead last quarter and leaped to the top of the retail sails list in America. Let the data tell you what’s real, not outdated, unsubstantiated and erroneous opinion.

The big difference between Packard/Studebaker and GM is that GM is the world leader. The worst case scenario in the coming year is they will run in the top 3. Packard/Studebaker were pinches of sand on the beach by comparison.

We would not have lost our entire auto industry! Something better, stronger and more sound would have taken GM’s place. America has a huge auto industry, albeit that all but one are either foreign or transplants, and that’s before we include Elon Musk, Fisker and other niche builders.

As much as I respect your views and weighted analyses in these digital pages of ttac, this (GM’s bailout) is one topic where I simply do not agree with you, and cannot envision GM ever paying back the US taxpayers with interest the amount of money that was squandered on this dead automaker.

It would have been better had we dumped GM like we did Chrysler, even if it took a bribe. Just look at Chrysler now! It got me to buy one.

However, all is not lost. GM will live another day and I should hope they will seek their fortune elsewhere, like in Asia. As long as I’m not contributing to GM, I can learn to adjust to this open wound on the American economy.

Aside from making my displeasure about GM’s bailout known, I do have a real life with tangible realities, like teaching my 16-year old grand daughter how to tow a 2-horse trailer with my Tundra tomorrow.

I’m inclined to agree that, on balance, the auto bailout is a continuing success.

HOWEVER, there will always be one question in my mind that will stick out when it comes to whether or not the bailout could have been avoided. It is this: Does current US Bankruptcy law allow foreign financial entities (not just banks) to provide Debtor-In-Possession financing (a crucial component for continuing operations while in BK)? Banco Santander is considered to be one of the world’s strongest banks, even though they are a Spanish-domeciled bank. This bank is currently partnering with FiatChrysler to provide dealer AND consumer financing for FiatChrysler’s customers.

Unless US law bars Banco Santander et al from providing DIP financing, don’t you think it would have been reasonable to ask why such a financial institution could not provided it, given they were strong enough to do so? Bear in mind that Santander purchased Sovereign Bank (a Northeast Corridor bank) during the height of the financial crisis.

At this rate, GM will probably end up costing about $10 billion, when all is said and done.

It should have cost less than that; the Treasury started selling stock too soon. Still, compared to the GDP that would have been lost in a depression, that $10 billion was a bargain.

It’s just a shame that some fans of the Detroit automakers believe that they deserved it. We needed to bail them out for the sake of the broader economy, but it wasn’t exactly a desirable thing to do, either.

GM is no weakling, over 60% bigger than Ford globally, and in the hunt for top dog in the world while Ford has fallen to 5th. GM had a lot more exposure than Ford to the North American financial crisis caused auto market collapse because they were a lot bigger at the time. Even Toyota lost money during the collapse, they lost even more than GM in the first quarter of 2009. GM did have a bigger legacy cost hit- $23B of their pre-Bk losses were to fund VEBA, 2/3 of the total funding by all three US carmakers.

GM is very much stronger than Ford today, particularly with Ford’s mountain of debt.

lol, what I don’t understand is why do they care? I don’t care what kind of cars are available there and I don’t care how they got there. Why do they care so much about what we drive? Must not be a lot going on down under

Poor Al has a political ax to grind, even though the blade keeps hitting him in the foot.

The Aussies used to have very high import tariffs and quite a bit of government involvement in the local auto industry, which included government cash and government-managed badge engineering. But about a decade ago, conservative prime minister John Howard promised them that their domestic producers would perform beautifully with reduced tariffs, free trade agreements and the elimination of subsidies. The locals would produce cars for export that the world would adore, and everyone would be happy.

Fast forward to today, and we can see what happened. Ford is bailing out, Toyota and GM want more government money, the Falcon is dead and the Commodore is living on borrowed time. Ford is on record as saying that it is leaving Australia because of the reduced tariffs — there is no reason to build cars in Australia when they can import them from Thailand, Europe and the US, instead.

Al is in denial of this failed promise. Instead of accepting that his country is simply too small and too expensive to be an optimal auto producer, he wants to blame the US, instead. And since anti-Americanism isn’t exactly unknown Down Under, his manifestos also reflect a version of local patriotism that often takes the form of anti-English and/or anti-American sentiment.

(That, and he seems to be one of the few Aussies who bought a Chinese truck. Great Wall trucks seem to be his version of the manual transmission diesel station wagon. Fanboys, you know.)

I’m sure that BAFO finds blasting down gravel roads at 130 km/h in Northern Territory in an overpriced Ranger diesel turbo is a fine place to formulate policies conducive to the well-being of the US economy. As he is so fond of informing us. He opinions may, in my view, be safely disregarded.

“Like I have mentioned approximately 50% of the US vehicle market has an effective 53.5% tax levied on imports.”

[citation needed]

You claim that enormous tariffs are keeping manufacturing concentrated in the US, but you aren’t willing to show credible evidence of such. You also claim that said tariffs are creating noticeable market inefficiencies, even when US consumers are generally acknowledged to pay the lowest prices for comparable vehicles anywhere in the world. Your inefficiency doesn’t exist.

Al has convinced himself that Americans would be driving midsize pickups if there was no chicken tax.

Nevermind that Chrysler and Toyota have both bailed out of the midsized segment to focus on full-size trucks. They aren’t impacted by the chicken tax, yet they’ve decided not to serve that market, regardless.

Nevermind that Canada has no chicken tax, yet has very similar truck buying habits to the US. It’s simply not possible to discuss these things rationally with an anti-American ideologue.

@BAF0 – Can you give specific examples of imports hit with a 53.5% tax? I’ve seen as much as 2.5%. Anything else is safety and other regulations related and all cars must meet these, including domestics.

The costs of meeting regs is spread out across the platform’s entire production run. If it’s a niche vehicles, yeah it gets real expensive, but that’s true of domestic niche vehicles too.

Popular Japanese autos easily meet standards and regulations for 3 or more different markets with individual standards. It’s a non issue if it’s something that sells.

@DenverMike
Again, you present yourself as a fool and idiot. (sorry TTAC readers).

Here is a cut and paste from another site directed at YOU, WITH links on the very question you have just asked. Why did you do such a stupid thing, you already knew the answer.

Why are you such a moron. Why do you troll. Why? Because you are a UAW sponsored fool.

Here is the cut and paste.

……………………………………………………………

@DenverMike – I’ll throw you a bone since it is a legitimate question, where did I get the 26% figure? Here is a direct quote:
“The United States has a 2.5 percent tariff on European-made passenger vehicles and the European Union has a 10 percent tariff on American-made passenger vehicles. Regulatory differences between the markets are equal to an added tariff of 26 percent, Blunt’s group and the European industry association ACEA say in comments filed May 10.”
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130524/ANE/305249993#axzz2ZKMqOTGe

Tariffs are “per unit” unless you have proof with references that show otherwise.

……………………………………………………………

Now, before you come up with another lame ass piece of trolling, I stated EFFECTIVE tax. As has been mentioned to you many times in the past comprehend what is written.

CAFE, design regs, EPA, etc have an effective barrier equivalent to a 26% tax. Now, add that to the 25% chicken tax, then add another 2.5% import tax and walla, you have an effective tax on some imports of 53.5%.

I know the UAW and US manufacturers don’t want the public to see this. This is why the US auto industry is extremely protected.

Hence my arguments of the US creating a level playing field and restructuring its motor vehicle industry to be less reliant of this kind of protection.

This sounds like the pot calling the kettle black. (Although I think the pot is a much darker shade of black.)

The US tariff rate for imported motor vehicles is 2.5% (Chapter 87 of the US Tariff Schedules). The EU rate is 10%. Chalk one up for DenverMike.

The 26% effective tariff rate you quote is because of differences in regulations between the EU and the US. It works both ways in that US vehicles are more expensive in the EU for the same reason. (That’s clearly indicated in the article although you conveniently forget to mention that.) If you consider it to be a trade barrier for imports into the US, it’s just as an effective trade barrier for exports from the US.

There’s nothing in the regulatory background that would indicate EPA, DOT or CARB developed regulations because of a desire to protect the domestic automotive industry. Indeed, if you look at the relevant dockets, you’ll notice most of the adverse comments are from the domestic manufacturers. Chalk up another one for DenverMike.

In addition, since the effective tariff rate is a result of differences in the regulatory schemes, are you proposing that we should adopt the EU approach and let the European Commission dictate US policy?

Finally, you’d be in a much stronger position if you had clearly indicated the 25% chicken tax only applies to light trucks and as a result, it impacts a very small portion of the US market. It appears that manufacturers, such as Ford, have found a way around the tax for those vehicles that have actually have a market in the US. I’d have to do a little more research, but my guess is that the tax impacts less than 2% of the market. (How many full size trucks do you see being manufactured in the EU?) I’d call this one a draw.

Looking at the big picture, an unbiased observer would note that there are more trade barriers (if you base the comparison on published or effective tariff rates) for US manufacturers exporting vehicles to the EU than the reverse. The only exception is light trucks and I would make the argument that the number of impacted vehicles that have an actual market in the US is extremely small.

Unfortunately, the previous editor of this website spent a lot of time claiming that there were two sets of regulations governing autos – the US, and everyone else.

That isn’t correct. There is a UN agreement, but it isn’t universally applied. For example, Japan has its own unique “type approval” system. Its crash test standards are a blend of EU and US regs, and it has its own emissions standards. Until recently, the Aussies had their own standards, including an oddball child seat restraint system that nobody else uses and that cost a fair bit to install in imported vehicles.

It’s odd to claim that the US standards are some abhorrent or bad. The US has been a leader in establishing safety and emissions standards, and for the most part, they’re better than those used by the Europeans.

There’s no reason to increase US emissions or put American drivers at risk just to please a few people who like to squawk on the internet. We’re a sovereign nation, and we’re free to protect our citizens as we see fit. This obviously hasn’t stopped foreign automakers from doing business in the US, often selling us cars for lower prices than they do in their home countries.

You should read the whole article, BAF0. Unless a citation is given, 26% is just an inflated estimate to push the agenda. And by US OEMs, no less. Hmmmm…

Now imagine a Jetta hit with a 53.5% Tax…

And the subject is niche vehicle hardly worth exporting anyway if they’re just selling 20 to 30,000 vehicles (in the entire production run?) A ‘non issue’ when talking about 500,000 vehicles, obviously.

The article’s quote is hardly based on anything real and is vague for a reason. And just the type of links you love. The ONLY type it seems.

And I won’t even get into the Chicken tax trolling nonsense. That alone says it all.

Right. And there’s nothing stopping Euro OEMs from building in the US right now, exclusively for Eurozone export and totally bypassing the US market for its outrageous 26% cost of adapting to US safety regulations and whatnot. Yeah right!

Actually, conforming to US, ECE and world regs (similtaneously) has never been an issue for OEMs selling high or medium volume. Same with US import tariffs. Not a problem. But I can’t speak for very high Euro tariffs.

Complaining OEMs are only making Chicken $H!T excuses for sub par, unwanted and or extremely low volume niche vehicles.

Sorry. If the US regulations where different you would have the range of vehicle we have on offer in the US.

We have companies that import only 1 000 vehicles per year. Even VW expressed they would import Amaroks if the chicken tax didn’t exist. VW stated they need a volume of 100 000 Amaroks per year to build a manufacturing facitlity in NAFTA.

@BAFO – 25% would affect trade, but why not take advantage of a loophole? Loopholes that amount to around 2%. And who has paid 25%? Free trade is what everyone in the world wants, especially US OEMs. US OEMs (and therefore the UAW) have the most to gain. Absolutely positively. Pony cars could be a hit, around the world. Same with full-size SUVs.

US full-size pickups would sell great around the world. Don’t kid yourself. Their slightly wider stance could be an issue for some, but not everyone in the world lives in Medieval villages. But there’s much to gain from pickups spanning the gap between mid-size pickups and full-size commercial medium duty flatbeds and cut-off vans. Great opportunity for US full-size. Why fight them? Why the hate? Do full-size trucks represent all that’s “American”?

There isn’t a worthy outcry for more mid-size trucks in the US, but fleet and other cheapskates would love more stripper choices for sure. Global OEMs just have to ask Mazda, Mitsu or Isuzu if it’s a good idea to come to America. Especially setting up a dealer network to sell 1,000+ vehicles, mostly to fleet?

Regardless of what VW wants you to believe, they’d shoot themselves in the foot by selling a low margin, BOF (that costs as much as 1/2 tons to build) vehicle in the US, cannibalizing their highly profitable car lines. Subaru found that their fwd Baja ate away at their Forester/Legacy/Outbacks sales and had to kill it promptly.

If Mexican assembly works for other VW cars, why should a truck be any different?

The Frontier can barely sell 50K units, so what chance do any global OEM have of selling anything worth their efforts?

Besides slight technical changes, new sheet metal and gas engine, what’s different about the US spec Colorado? And would US consumers be good with a Thai built Chevy? Isn’t that what forced domestic assembly, not some non sense about chickens?

Correction – Not all OEMs in the world want “Free Trade”. Any OEM that’s already setup footholds in most meaningful markets around the world, have nothing to gain from more competition. Why would Honda, Toyota, Nissan, Mazda, Subaru,VW, etc, welcome newcomers to the US from places around the world they already sell in?

If it’s anyone lobbying to keep or increase US “protection”, it’s foreign (owned) OEMs, already selling in the US.

The “truck” definition for CAFE represents about 1/2 the US market, the majority of which are passenger vehicles.

The “truck” definition for the light truck tariff represents 11% of the market. The tariff does not apply to a vehicle assembled (including CKD) anywhere in NAFTA.

GM Australia (Holden’s) share of GM can be summarized:
Holden employs 2.3%, sells 1.2% and builds 0.6%
The operation loses a huge sum relative to its size despite massive and on-going government assistance. It has no chance to stand on its own as anything more than a sales organization.

As I have written repeatedly, and you must know as well: The Chicken tax applies to light trucks that are not primarily for carrying passengers.

Pickup trucks comprise about 11% of US new vehicle sales. The rest of the CAFE “Truck” segment consists of SUV, CUVs and Minivans which do not have the tax because they are primarily for carrying passengers. The Ford Transit Connect circumvention of the tax by simple installation of a rear seat is evidence of this. Passenger vehicles imported from outside of NAFTA have just a 2.5% tax. Japanese cars are often sold for less in America than their pricing at home to meet competition.

Why do you think a Holden Commodore costs you $50,000 while the Chevy SS will sell for far less here?

The door is open. All that is necessary to enter is to be good enough.

I agree the tax should go, always have, always will. I present facts and use logic to reach conclusions.

Anyone in business, especially the most complex and expensive of consumer products- motor vehicles- has to let data and facts inform them, not preconceptions and emotion. Facts.

A fair analysis of the facts strongly supports the competitiveness and open nature of the NA market.